Chinese Inflation Accelerates; Factory Gate Inflation Slows

China’s consumer price inflation accelerated more than expected in March and producer price inflation eased further, official data showed on Monday.

Consumer price inflation rose to 1.5 percent in March from 0.9 percent in February, the National Bureau of Statistics reported. The rate was also above the economists’ forecast of 1.2 percent.

Core inflation that excludes energy and food prices, held steady at 1.1 percent in March.

Food prices dropped 1.5 percent, as prices of pork plunged 41.4 percent from the last year. At the same time, non-food prices moved up 2.2 percent.

Producer price inflation eased to 8.3 percent in March from 8.8 percent a month ago, another report from the statistical office showed. Nonetheless, prices rose more than the expected rate of 7.9 percent.

The uncertainty caused by the war in Ukraine is likely to keep global commodity prices elevated in the near-term, Sheana Yue and Julian Evans-Pritchard, economists at Capital Economics, said.

But base effects mean that headline producer price inflation will continue to decline over the coming quarters, the economists noted. And although consumer price inflation may rise further, weak consumer demand means it is unlikely to exceed the government’s annual target of 3 percent this year.

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